Oil Prices Jumpy As Libya’s Situation Worsen

Oil markets appeared to enter a new cycle of volatility as tension is escalating in Libya the 17th world largest producer of oil with 1,789,160 barrels a day (source: US Department Of Energy year 2009). In London ICE early trading Monday morning, futures contract deliveries for April showed the Brent trading at $US 104.3 +1.7% . Growing concerns for instability in the middle and Libya’s internal situation taking a turn for the worst during the week end promises further volatility. The region sensitivity to popular uprisings that have already deposed two long servicing dictators and further threatening more nations is showing repercussions to financial markets. Sunday’s visit to Saudi Arabia by US Joint Chief of Staff Admiral Mullen points to shared concerns both in Washington and Riyadh.

In Libya the situation is headed towards another escalation of violence this Monday as various western nations have issued travel warnings to their citizens regarding the embattled country. Gaddafi’s son Saif al islam’s vow to ‘fight to the last man standing’ live on government television late Sunday night was clear indication of more violence in order to quell the seven days old uprising. To date the government had carried out a systematic massacre against protesters using a variety of military tactics employing sustained use of machine gun fire as well as snipers ambushes. The toll for these combined attacks is reported to have passed the 200s killed with injured approaching the 1,000.

Isolation and Chaos

However the Gaddafi clan appears even more isolated after a string of defections from Libya’s ambassadors in India and at the Arab League. More significantly the reported fall of Benghazi, Libya second largest town into protesters hands. Benghazi’s fall would confirm a shift of the army’s loyalty in favor of the protest movement. It has been very difficult from sketchy news accounts to ascertain the army’s disposition as most of the violence on the ground seems to have been attributed in larger numbers to various militias loyal to Gaddafi’s sons.

In any event the sightings of ‘black African mercenaries’ hired by Gaddafi massacring unarmed Libyan s are likely to force the army undoubtedly to the protesters side especially in a nation that has seen spats of racial violence against black African immigrants in the past.

The ‘black African mercenaries’.

We find that the appearance of ‘black mercenaries’ pro-Gaddafi militias is highly plausible as fellow African dictators would naturally support Colonel Gaddafi in light of long standing close relationships and mutual assistance. Gaddafi constantly supported financially and militarily other African dictators and even alleged warlords. On numerous occasions during his 42 years reign the dictator would send Libyan troops to sub Sahara Africa countries in order to save embattled dictators. A Libyan army foray into Uganda’s in a futile attempt to save Idi Amin regime from a Tanzanian military invasion in 1979. An involvement in Centre Afrique with Bokassa first and later with Patasse. Then in Chad with rebel Goukouni Oueddeye and later with president Deby. Finally the brutal civil wars fought in Liberia and Sierra Leone of the 90’s for which many experts have found Libya to be a major provider of training and logistics in collaboration with protege Blaise Compaore president of Burkina Faso. The list is longer.

An unlikely End for Gaddafi

The situation appears in effect very bleak for Gaddafi’s survival. With this latest massacre to his credit, Gaddafi would find it difficult to stay off the International Criminal Tribunal short list even in the event of a miracle survival from the current crisis. Enduring resentment in the west and very little sympathy from the ‘great champion Pan-Africanism’ in the Arab world diminishes his prospects for a peaceful exile. With the sustained momentum for revolutionary changes that his fall would highlight, he would also prove to be a very encumbering liability for all of his African dictators/friends. In all there seems to be virtually no way out for Gaddafi and his defiant sons as we enter another volatile day.